Ten fraud prevention tips for business

A typical organization loses five per cent of its annual revenues to fraud and the median loss of each reported incident of fraud was $160,000, according to a 2010 Association of Certified Fraud Examiners

1. Protect your business from cybercrime with firewalls, anti-virus programs and passwords and controls for employees working outside the office on personal computers. Remember, information can be removed easily from office computers with portable memory drives.

2. Protect information shared on social media sites. Train employees on the dangers of sharing personal information which can lead to fraud. Standard profile information posted by employees on social media sites can help hackers de-code passwords.

3. Be aware of information stored on the hard drives of photocopies and cash registers. Purge information on a regular basis or save off-site in a secure environment.

5. Let your employees do the watching and reporting. Start a confidential whistle-blower program. According to the ACFE report, the most common form of detection of fraud is through tips. Of these tips, 49 per cent come from employees.

6. Protect your business from fraudulent third parties. Perform due diligence of third parties involved in your business. Be wary of advertising and business opportunity solicitation.

7. Institute a written fraud policy.

8. Analyze your data. According to the ACFE report, 29 per cent of fraud is detected by management review.

9. Conduct surprise audits. Their most important benefit is creating a perception of detection.

10. Institute employee support programs and fraud training for employees and management.